Would like to have a 400mm prime one day, cheapest one Canon offers is 400mm f/5.6L for $1.2k. But I've realized that there are some FD 400mm lenses that are significantly cheaper (~$300 price range). Granted, I know that the lens will be fully manual, but will be worth it in order to have some great telephoto reach.

I do have an FD-EF adapter and it increases the focal length by 1.25x and the light coming through is getting less about 2/3 of a stop. A 400mm F5.6 lens gets a 500mm F7.1 lens for example. With a 1.6x crop sensor you get "800mm" F7.1. But it works in Av-Mode, especially in bright day light and focusing is OK in live view (+magnification). Still the image quality is slightly worse.

They are interchangeable, at least as far as I can fathom from the information :S

It's rather more how they don't affect focusing, or at least try to. The slimmer the adapter is, the less problems you will get since you are closer to the original register distance. It's not entirely without issues, but much better than their fatter counterparts.

Due to the differences in mount distance, and adapter thickness, you get an extension tube effect which may mean you lose infinity focus. However, with longer focal length lenses, extension has a much smaller impact than on shorter focal length lenses. If the telephoto can go "past infinity" that may be enough to allow infinity focus.

The other option is some adapters use an optical element to work around the extension effect, which gives them a teleconverter behaviour.